Lego owners buy stake in German wind power project

Reuters News
Posted: Feb 23, 2012 5:43 AM
Lego owners buy stake in German wind power project

COPENHAGEN (Reuters) - The family holding company that controls Danish toymaker Lego has agreed to buy 32 percent of a German offshore wind energy project from Denmark's DONG Energy for more than $500 million, DONG said on Thursday.

DONG Energy said Lego Group's parent company Kirkbi A/S would invest 3 billion Danish crowns ($534 million) for the stake in the 277-megawatt Borkum Riffgrund 1 wind farm, which is scheduled to be fully operational in 2015.

Kirkbi A/S is the Kirk Kristiansen family's holding and investment company, which owns 75 percent of the Lego Group, the world's third-biggest toymaker, known for its colorful, snap-together bricks.

Altogether, state-owned DONG Energy agreed to sell 50 percent of the project for 4.7 billion crowns, it said.

In addition to the sale to Kirkbi, the Oticon Foundation would invest 1.7 billion crowns through its investment company, William Demant Invest A/S, to take an 18 percent stake in the project, said DONG Energy, which will retain the remaining 50 percent of the project.

"The agreement is a major step forward for DONG Energy's partnership model for financing offshore wind farms," Chief Executive Anders Eldrup said in a statement.

DONG Energy has earlier sold stakes in wind farms to institutional investors, mainly pension insurance groups, but the agreement with Kirkbi and the Oticon Foundation is its first agreement to bring in privately owned companies, DONG said.

The Lego Group aims to cover 100 percent of its energy needs with renewable energy by 2020, said DONG Energy, which is the world leader in offshore wind farms, with 1.3 gigawatts of capacity in operation and about 1.1 GW under construction.

"With the investment in the project, the Lego Group will be able to meet its target, as the wind farm is expected to produce more electricity than the company's total electricity consumption up to and including 2020," DONG Energy said.

The Oticon Foundation is the controlling shareholder in Danish hearing aids maker William Demant Holding, which aims to improve its energy balance, DONG said.

The plan is to install 77 Siemens wind turbines, each with capacity of 3.6 MW, at the Borkum Riffgrund 1 wind farm, which will supply enough electricity for more than 285,000 households, DONG Energy said.

It will be built 55 kilometers (34 miles) off the norwest coast of Germany in the North Sea, with construction to begin in 2013 and the first power expected in 2014, DONG Energy said.

The transaction, which is subject to approval by competition authorities, is expected to be completed in the second quarter of 2012, the company said.

($1 = 5.6166 Danish crowns)

(Reporting by John Acher; Editing by Will Waterman)